State advances fairgrounds sale

California has tentatively agreed to sell the Orange County Fairgrounds to the city of Costa Mesa.

A news release issued by the California State and Consumer Service Agency reports that a tentative deal to sell the fairgrounds for $96 million was reached with the city.

The release also states that the Orange County Fairgrounds Authority, which comprises the five council members, will “immediately” pay $19.2 million to the state. The rest of debt will be paid over the next 40 years with a 5% interest rate.

The deal must be approved by the state Legislature before it is finalized.

Costa Mesa is off the hook as far as being financially responsible for the Orange County Fairgrounds’ debt. But although its deal with Facilities Management West gives it the property title of the 150-acre fairgrounds, maintains the site for fair and exposition use, it doesn’t give Costa Mesa what it has been fighting for all along — complete public oversight.

After a meeting in closed session and a tense debate in an open session, a frustrated City Council Tuesday approved a financial and operating agreement with Facilities Management, the private financial group that once offered $55 million to the state for the fairgrounds. Councilwoman Katrina Foley dissented.

The Orange County Fairgrounds Authority will meet annually with Facilities Management to discuss business plans and give suggestions. Facilities Management, which has a 55-year lease with the city, doesn’t have to take any of the city’s suggestions.

“I’m very disappointed,” said former Costa Mesa Mayor Sandy Genis, who led efforts to preserve the fairgrounds. “And my primary disappointment lies in the total lack of public accountability and public participation that I see there, both in terms of how we got to where we’re at and in terms of how things would operate in the future.”

A threat from the state to place the fairgrounds back on the market by Wednesday if a financial and operating agreement was not agreed upon also made it difficult for the City Council to back out or demand more from Facilities Management.

“It is definitely a drawback and very unfortunate that we had to work under the circumstance that we had,” said Councilman Gary Monahan. “It is unfortunate that in fact Fred Aguiar and the state will put this to bid tomorrow. They will, there’s no doubt about it. If that happens, there will be no public meetings, there will be no JPA [joint-powers authority], there will be no much of anything other than what we have with a private owner.”

The state’s consistent demands to get the deal done in a short period might be for more reasons than its need to shore up funds for its ailing budget. And it has put the city in an awkward position.

“I know that one of the speculations that the state has held all along in dealing with the city is this feeling that perhaps we were probably trying to stall things and drag things out without the attempt to purchase the property until it got to the point to where the governor would be out of the office,” City Manager Allan Roeder said.

The agreement between Facilities Management and Costa Mesa provides the city with the money it needs to pay for the $96 million it offered the state.

It also ensures that the fairgrounds would be utilized for the annual summer fair, for the equestrian center and for the Youth Expo for sports and educational purposes.

But Facilities Management will have the right to resize and relocate programs and activities within the fairgrounds if it wishes to do so.

What’s not clear is the fate of the Orange County Market Place. According to the agreement, the weekly swap meet is given an

18-month transition period to maintain the current contract.

Once the period ends, Facilities Management can choose to sign on with the current swap meet operator, Tel Phil Enterprises Inc., or pick another operator.

The contract, however, requires Facilities Management to keep a market place similar to the one operating now. If Facilities Management wanted major change in the swap meet operation or a change in the number of days, it would have to be approved by the Orange County Fairgrounds Authority, according to the agreement.

Facilities Management has yet to sit down and discuss a deal with the current swap meet operator.

Jeff Teller, president of Tel Phil, wouldn’t comment as the deal between the city, the state and Facilities Management has not been finalized yet, he said.

Tel Phil was part of American Fairs and Festivals, a group that formed to operate and finance the fairgrounds for the city. The group had the upper hand in negotiating a deal with the city, but that plan failed.

After failing to come to an agreement with American Fairs, the city began working exclusively with Facilities Management, which works with Gary H. Hunt’s California Strategies, a public affairs firm.

Hunt is part of a close circle in Sacramento. He now services as State Finance Chairman for Gov. Arnold Schwarzenegger .

The relationship Hunt has with officials in Sacramento had nothing to do with Facilities Management’s deal with the city, Roeder said.

As part of the negotiation agreement, Facilities Management can’t work directly with the state, he said.

The council members say the deal with Facilities Management isn’t the best one, but it’s the best they have got.